Asset Protection: Your Personal Insurance
Contributed by GWS Group
25 September, 2018
The developments in Turkey are strikingly impressive. Impressive in a way that shows how sustainable asset protection must be set up in order to protect assets and personal freedom. While the fiduciary industry has been developing tax optimization solutions for decades, the trend is now moving more and more towards asset protection. The last few months in Turkey show why you too should act with foresight; because you need insurance before the damage occurs.
To briefly summarize the events:
The government of Erdogan has deprived more than 150,000 Turkish citizens of their passports, thus making it impossible for them to leave the country. Thousands of accounts have been frozen and blocked for suspected terrorism. Payments could not be executed anymore. Credit cards were blocked.
The national currency, the Turkish Lira, is in free fall. Despite multiple interventions by the Turkish National Bank, the Turkish currency has lost more than 180% against the Euro since 2013. Inflation of 17.9% in August is near an all-time high.
The GWS Group looks after some well-known Turkish entrepreneurs with their families and is able to sustainably protect their assets with far-sighted planning. Through targeted asset protection, you work like an insurance company, to be prepared for the worst-case scenario. It is, of course, in everyone's best interest if the "insured event" never occurs; nevertheless, it would be naive to think that such risks only affect emerging markets.
In the US, the national debt is at record levels and the US trade dispute threatens to escalate. The swelling conflict between Russia and "the West," the tense relationship with Iran, with the increasingly anti-European stance in many euro-states and the left-right government in Italy threatening to flare up a new Euro crisis, the debt burden of private individuals and companies in China, all this clearly shows that we are steering straight into a crash. The strong US dollar has been causing serious difficulties for emerging economies for some time now, and the United Kingdom may be heading for a disorderly Brexit. Overall we are faced with an uncertain outcome, an overall situation that without insurance would be a kind of Russian roulette.
But how can you protect yourself consistently against these uncertain odds?
Good asset protection is structured on several levels:
a) Geographical diversification of assets and distribution across multiple banks
b) Diversification of assets and setup of an offshore gold deposit, which is not subject to the automatic exchange of information (AEOI / CRS)
c) Relocation by applying for a residence permit and citizenship through Citizenship-by-Investment programs.
With provision such as these in place, our clients from Turkey were optimally equipped and insured so that not only were they able to protect their wealth and personal freedom, but they could also see significant added value. The value of the precious metal as insurance can currently be observed very well in the example of Turkey, where inflation eats up the purchasing power of the Lira. Calculated in Lira, the price of gold has more than doubled since the beginning of 2017. From the point of view of Turkish gold investors, the insurance has more than paid off.
Simply put: when currencies are weak, gold is strong. And in our view, there will be no shortage of weak currencies in the coming years. Geopolitical and economic crises in the near future will, unfortunately, also be unavoidable, thus a thorough planning for sustainable protection should play a key role right now.
Our experts are happy to provide you with advice and your personal asset protection structure.
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